Circumventing the Cap

Discussion in 'Fugu's Business of Hockey Forum' started by jb**, Jul 12, 2005.

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  1. jb**

    jb** Guest

    Not sure if has been brought up or not. Without knowing any specifics of the CBA do you think teams will offer perks on top of the contract they sign that wouldn't be counted against the cap like: offering housing, cars, food allowance,pay them x amount of dollars to do a weekly q&A on their website, things of this nature. I know some players already receive cars from local dealerships by being their sponsors . You offer to buy 5mm dollar house for a player would be pretty enticing IMO
     
  2. Captain Ron

    Captain Ron Registered User

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    This is just a guess but with a 600 page cba I'll bet they covered almost every way to circumvent the cap.
     
  3. jb**

    jb** Guest

    These are basic issues which they probably have, however there will be people who are employed by teams to find loopholes, this will be there sole job.
     
  4. Captain Ron

    Captain Ron Registered User

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    I think that is one of the reasons the negotiations are taking so long. Lawyers want to explore every possible scenario that they can think of. The wording of the new CBA will probably reflect this.
     
  5. ryz

    ryz Registered User

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    I'm sure there is something in there to cover the use of a "personal service contact" between a player and an owner. I would assume the penalty would be huge if a team were caught doing something like this. 5 years worth of 1st round draft picks or something.
     
  6. sakicisstupid

    sakicisstupid Registered User

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    yeah but all it takes is one loop hole and poof goes the cap
     
  7. Timmy

    Timmy Registered User

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    They will have a clause to deal with loopholes that have not yet been exploited, that in essence go against the "spirit" of the cap.

    Trust me, CCRA (revenue canada) has it, and this CBA will have it. Now, it may be that the exploitation can be subject to appeal to commission, it may be that an attempt to circumvent the cap by innovative ways not yet thought of by the Messenger will be allowed by the league, but it's unlikely. A first-time "offense" probably won't result in a fine, since the league would basically rule on its legitimacy or not.

    Trying to "hide" a transaction, on the other hand...
     
  8. And the league has had the last decade to dream up every imaginable loop hole possible. As well, they have the NFL and NBA CBAs to work from. I seriously doubt the loop holes you suggest have a chance of being missed. In fact, the NHLPA would be pissed if said loop holes were used. Since the UNION is guaranteed 54% of revenues they will be wanting to make sure every single bit of revenue is accounted for, including money that goes to salaries. The NHLPA will be as much of a hawk when it comes to cheating as the NHL itself will.
     
  9. pld459666

    pld459666 Registered User

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    .

    I think that larger markets like NY will be able to speak to some of the corporations that own luxury boxes and start trying to bette rmarket their players.

    When a UFA is talkign to a larger market team they can also sell the player on all of the other financial opportunities that that market can offer that a smaller market may not be able to.
     

  10. What would those be? I'm curious. :confused:
     
  11. blitzkriegs

    blitzkriegs Registered User

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    For one, corporations do NOT own luxury boxes, they are LEASED. Huge difference.

    Two, I'm sure the bankers, lawyers, etc. all want to know how they can learn something from a hockey player. :dunno:

    Third, part of persuading a player to play in 'x' city is selling them on what the city has to offer. That is nothing new...

    Anything else you need to suggest?
     
  12. blitzkriegs

    blitzkriegs Registered User

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    This is already a part of the old CBA. Players have certain requirements as part of the standard player contract. Nothing new here...

    BTW - Dealerships give cars as COMPENSATION for doing advertising. Nothing new here...

    Teams pay rent for players traded during the season. Nothing new here...

    I'm going to assume that if you KNEW the specifics of the CBA, you wouldn't understand what it meant.

    Thanks for such insight on trying to circumvent the cap redux...
     
  13. Slapshot17

    Slapshot17 Registered User

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    You might be able to get around it with older players. For example you could pay Yzerman 500,000 next year, counting against the cap, and then give him 5 million the year after to be a scout or some other office position that wouldn't count against the cap.
     
  14. Timmy

    Timmy Registered User

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    But...


    You couldn't necessarily put it in writing.

    So, you're not circumventing the cap by hiring him after he retires, at $5m per.
     
  15. GSC2k2*

    GSC2k2* Guest

    Well, when the team books get audited, that will probably come up, once Detroit's scouting expenses come up by a huge amount. Kind of a red flag.
     
  16. CarlRacki

    CarlRacki Registered User

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    If the NHL follows the NFL model, or even borrows from it, this wouldn't be allowed. The NFL CBA specifically prohibits players and teams from entering "into undisclosed agreements of any kind, express or implied, oral or written, or promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind: (a) involving consideration of any kind to be paid, furnished or made available or guaranteed to the player, or Player Affiliate, by the Club or Club Affiliate either prior to, during, or after the term of the Player Contract;"
    The agreement also includes a general provision barring any effort to circumvent or defeat the intent of the cap.

    If the league suddenly discovered Steve Yzerman working as a $5 million a year scout they'd have an inkling some funny business was going on.
     
  17. kdb209

    kdb209 Registered User

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    The NBA has similar language, and teeth for David Stern to back it up. Just ask the T-Wolves about trying to circumvent the cap with Joe Smith. It cost them $3.5M, 5 first round picks, and a GM suspended for a year.
     
  18. jb**

    jb** Guest

    No problem slapnuts. You shouldn't assume anything. If you read the post I know dealerships give cars to players. Not all teams pay rent either get your facts together.
     
  19. gretzky1545

    gretzky1545 Registered User

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    uh, you should bow out of this argument, as you aren't likely to win it. Thinking that something so obvious as giving a player 5 million bucks as a "friendly gesture" wouldn't be caught by the league(and that provisions hadn't been made for this) isn't likely to lead people to believe you have the slightest knowledge of the CBA.
     
  20. jb**

    jb** Guest

    Probably no one on this site has any knowledge of what the CBA will be or looks like.
    It is called a topic of discussion, was using the 5mm as an example "things of that nature" as a way to entice players to sign with a particular team, offering them perks. It may not happen this year but we all know their will be "creative accounting practices" conducted by teams that want to spend over the cap IMO. N
     
  21. gretzky1545

    gretzky1545 Registered User

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    well obviously many of them do, as they easily dispelled your idea for circumventing the cap.
     
  22. Fish on The Sand

    Fish on The Sand Untouchable

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    ahhhh Joe Smith. Of all the players, in all the world, the T-Wolves had to screw their future by circumventing the cap for a bench player.
     
  23. Skk82

    Skk82 Registered User

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    a lot of smart lawyers have 600 pages of legal jargon to tie down all of these loopholes.

    there can always be shady payments like the t-wolves and joe smith fiasco, but methinks that if you or i could think of possible ways around the cap then surely the lawyers have covered it in the massive document.
     
  24. blitzkriegs

    blitzkriegs Registered User

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    Under the terms of the old CBA, teams that acquired a player via trade during the regular season had to PAY RENT for the acquired player. That is a FACT. Again, you can't read.

    More likely than not, this CBA is going to see a REDUCTION in trades just like NFL, NBA because of the cap restrictions. Therefore, the owners are going to be paying LESS in this clause in the future. It will stay in the new CBA.

    And I read your post. Your post was inaccurate. You stated players are given cars for sponsors. They are not 'given' cars, it is a form of compensation in lieu of money. It's called CONSIDERATION - look that term up.
     
  25. jb**

    jb** Guest

    Do you have a link that states they pay the rent for an acquired player?

    They are given cars to use and yes it is a form of compensation because they are the sponsor for that particular dealer. They also recieve money from the dealership. They make appreances, sign items things of that nature. Trades are pretty non existent in the NFL, trades are frequent in the NBA. There probaby will be a reduction of trades I agree but there will still be action.
     
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